Cathay Fortune offers to buy Australian mine in Africa

Monday, 08 October 2012 12:34

Cathay Fortune currently owns 13.7 per cent of the ordinary shares of Discovery Metals. (Image source: free/Flickr)Chinese private equity firm, Cathay Fortune, has offered US$848mn to acquire Australian copper producer Discovery Metals who own a number of mines in Botswana

The deal will see Cathay Fortune take 75 per cent and China-Africa Development Fund 25 per cent of the ordinary shares of Discovery Metals.

Cathay Fortune currently owns 13.7 per cent of the ordinary shares of Discovery Metals.

A Cathay Fortune statement said, “The transaction will not be subject to financing, as the cash consideration will be funded by a term loan facility of up to US$600mn to be provided by China Development Bank, and cash and available liquidity of Cathay Fortune and the China-Africa Development Fund, which have both received approval from China’s National Development and Reform Commission.”

Cathay Fortune has also received approval from Australia’s Foreign Investment Review Board with respect to the transaction, the statement added.

Citigroup will act as financial adviser to Cathay Fortune and Swiss financial service provider, UBS, will act as financial adviser to Discovery Metals in connection with the transaction.